What would you do if your top-performing talent went to your competitor? Could you replace them? How long would it take and how much would it cost? Better yet, would you know why they left in the first place?
A recent employee retention report, “The Truth and Trends in Turnover,” revealed the root cause behind why employees leave their companies to seek new professional positions. The Work Institute found that the successful economy is providing a growing job market full of new opportunities for employees who are not happy in their current role. They predict 42 million employees – approximately one in every four – will leave their jobs between 2018 and 2020, costing employers upwards of $680 billion to replace them.
Unfortunately, the report also found that 77 percent of employee turnover is preventable. Employees leave when current employers fail to meet their needs and expectations. While many employees leave to pursue better-paying positions, The Work Institute report discovered that a lack of development opportunities, work-life balance and poor management are the real reasons for employee turnover.
Of the 10 categories listed in The Retention Report, the top five are within the control of company leadership and culture.
• Career Development: Lack of opportunities to grow into new roles (21%)
• Work-life Balance: Lack of scheduling flexibility (13%)
• Management Behavior: Unprofessional and unsupportive leadership (11%)
• Well-being: The inability to address personal and family issues (9%)
• Compensation: Lack of competitive pay (9%)
The U.S. Department of Labor announced that the number of jobs on record surpasses for the first time the number of job seekers in the marketplace. With this news, it's no wonder employers are beginning to create workplace retention strategies to keep professional talent. In his opening keynote at the SHRM 2018 Annual Conference in Chicago, CEO Johnny Taylor said, “We now have more jobs than people to do them, which means our labor [shortages] are going to get worse.”
1. Employees Need Purpose
The needs of employees have shifted. In the past, pay raises were the logical solution for disgruntled employees. In today’s marketplace, it’s a short-term fix to a long-term problem. Employees seeking employment or remaining at a current job for a pay increase alone will only stay happy for so long. Today's employee wants to be a part of a company’s legacy. They want to feel invested in their employer’s success by knowing their time, skill and effort serve a meaningful purpose.
Employees struggle to connect with their work and their company when they feel a lack of purpose. According to one study by Mercer, happy and successful employees are three times more likely to accept a position with a company that has a strong sense of purpose. Why? Because spending your day working for a cause increases productivity, morale and overall job satisfaction. Employees feel more motivated and valued.
Organizational leaders can consistently provide purpose to their team by:
- Communicating a strong company vision
- Routinely showing recognition
- Regularly acknowledging and expressing gratitude
- Discussing how the employee’s job directly impacts the company and clients
- Announcing customer success stories
- Frequently sharing the meaning and value of the company
- Focusing on big-picture priorities and eliminating non-priority aligned tasks
2. Flexibility Matters
Connecting with your employees in a meaningful way can shed light on what they value most. Try to get to know those who work for you. You can honor their unique situations by allowing workplace flexibility whenever possible.
A 2016 FlexJobs survey found 84 percent of parents place flexibility first on their list of workplace needs, with work-life balance ranking closely behind at 80 percent. Even though flexible working hours are valuable, it comes in more forms than just work arrangement. Employees want employers to trust them to make decisions on the type of work done, how, when and by whom. They want to be empowered to act in the best interest of the organization, not just take instructional direction. For this to become a part of workplace culture, trust must be established. Leaders must encourage employees to think innovatively. They must demonstrate confidence in their employee’s ability to engage others and make decisions. Managers must trust employees will be as productive, effective and efficient when working from home as they are in the office.
3. Communication and Connection
New hires often report having a different experience in their onboarding process versus their day-to-day team engagement. In the beginning, new employees are excited. They learn about the company, culture and leadership. Everything is new and intriguing. They feel important and valued. Once they transition into their work team, the experience often changes. Many employees begin to feel ignored and uninformed. They lack a sense of belonging and importance.